1. (25 points) It is proposed to develop X and R charts to control the diameter of a product. The following data have been collected for some samples.

Sample # diameter values in sample

1 10.1, 10.3, 10.0, 9.9, 10.1

2 9.8, 10.2, 10.1, 9.9, 9.9

3 10.3, 10.2, 9.9, 9.8, 9.9

4 9.9, 9.9, 9.8, 10.3, 10.5

5 10.2, 10.3, 9.8, 9.9, 10.2

6 9.5, 9.9, 10.4, 10.3, 10.3

_ _

Construct X and R charts for this process and plot the X and R values of all the above samples in those charts.

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2. (Total 25 points) The Garden-variety flower shop uses 9800 clay pots per year. The pots are purchased at $20 each. The annual holding costs are estimated to be 25% of unit cost, and ordering costs are $55 per order.

(A) (10 points) Determine the economic ordering quantity (EOQ).

(B) (3 points) If EOQ is used for ordering, what will be the total ordering cost per year?

(C) (2 points) How many orders will be placed in a year?

(D) (10 points) What will be the total annual holding and ordering cost if the manager adopts a policy of ordering 1400 units per order?

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3. (Total 25 points) The demand for chair is 600 per month. Each chair costs $140. The ordering cost per order is $55. The monthly holding cost per chair is 2.5% of the cost of a chair.

(a) (7 points) Compute EOQ.

(b) (3 points) What is the length of ordering in days for ordering EOQ?

(c) (15 points) How much money will the business lose monthly by adopting a policy of ordering 500 chairs per order instead of ordering EOQ?

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4. (Total 25 points) It is given that K and L are the immediate upper level items for P in the product structure (BOM) and each unit of K needs 6 units of P and each unit of L needs 3 units of P. P is not required by any other items in the product structure. Given the following planned order release (PRL) for K and L, obtain the gross requirements (GR) for P and then obtain PRL for P in the MRP table if P has a scheduled receipt of 150 in period 1 and 400 in period 6, and on-hand inventory of 900 units. The lead times for K, L, and P are 1, 1, and 2 periods respectively.

Periods

1 2 3 4 5 6 7

K: LT= PRL 120 100 100 90 75

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L: LT= PRL 110 120 80 70

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P: LT= GR_________________________________________________________

SR_________________________________________________________

OH_________________________________________________________

NR_________________________________________________________

POR________________________________________________________

PRL

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7 points for obtaining GR of P in different periods

18 points for obtaining the rest of the values in the table for P in different periods.